How to Start and Manage a Small Business Successfully

By Don Bowman

  • Overview

    To start a small business, you should have a solid comprehensive plan for research and due diligence. Acquiring all the information possible about the niche that the business will operate in and the business location itself is vitally important. A comprehensive study of the market and the competition, as well as the market trends over the past several years, is helpful. All of this information is used to create a solid business plan so that the process has definite direction.
    • Step 1

      Purchase several blank double-entry ledgers to document the costs of starting the business, including the cost of filing for an entity and obtaining other licenses to start the business. Use one for capital investment and net income to business minus officer payroll and personal debt. The second journal should be used for payroll, deductions, taxes withheld and owed to the IRS. The third ledger should be used for daily and monthly business income and should show the amount of taxes collected and owed to IRS. The fourth ledger should show all expenses including utilities, lease, equipment, wholesale, licenses and insurance. If you are familiar with accounting programs, you can use an accounting program on the computer instead of writing everything in journals.
    • Step 2

      Make an assessment of all possible funding resources for the business such as liquid cash, equity in property, mutual funds, stocks, securities, IRAs, 401(k), term life insurance and any possible investors if applicable. Compile this information and put it into the ledger.

    • Step 3

      Determine the classification or entity of the business such as L.L.C., LLP or C corporation. Look closely at all the pros and cons to each before deciding on one. Set up the business entity, including the name of the business. Visit your state's division of corporations to set up the business entity. Most states have their division of corporations online, and you will be able to apply for the determined entity online.
    • Step 4

      Contact the IRS and request a federal tax ID number. This is for the business taxes to the IRS. Business taxes can be sent in monthly or quarterly.
    • Step 5

      Request an occupational tax license for the city and county, employee tax permit and sales tax permit. Some businesses, such as food establishments or establishments that handle hazardous waste, require special licenses.
    • Step 6

      Investigate the insurance agencies in the area for business insurance. This can be a costly proposition, so do comparisons. Generally they want 50 percent or more down and six months to pay the balance. Depending on the business, you may need different types of liability coverage. You will need to know what type of insurance the business you choose needs. For example: auto shops must have garagekeeper's insurance and attorneys and doctors have malpractice insurance.
    • Step 7

      Show that the business is open by putting up large sign in good view with the name framed in such a manner as to give the business an image. If the business is brick and mortar, put the sign in front of the business. If the business is online, put the sign on a busy highway. Use words describing the opening as an event, something other than a daily occurrence. Exposure is necessary to familiarize the public with this new business that will be advantageous to the community as large. Remember that people in general will not remember a common place occurrence or name and things of this nature unless it is presented to them in short order at least three times in close succession. The news media is a good place to start to give gravity to the situation. They can be used to build an excitement or anticipation to the opening event.
    • Step 8

      Document the figures from previous dates to compare as the business moves on. Use this to formulate strategy in the form of foresight to create new advertising for particular products sensitive to the seasons or economic environment. Have an employee training session and stimulus awards of some sort for job excellence. Make it something they won't want to miss out on, yet it does not have to be large--just well thought out. Make sure that inventory control is kept up on a computer base so that inventory depletion can be monitored in all areas. Lastly keep a good working environment and the surrounding areas pleasant for the public.
    • Step 9

      Have a process in place to hire and fire employees. Make sure you hire enough employees to cover the amount of work your business produces. Create an employee handbook outlining all rules, including dress codes, when payday is and what the employee benefits will be.
    • Skill: Moderate

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